Union Bank records 12% profit before tax for the first quarter of 2021

NIGERIA – Union Bank, a commercial bank, has announced that its profit before tax rose by 12 per cent to N6.9 billion (US$18.13m) as of the end of the first quarter of 2021 from N6.2 billion (US$16.29m) in the corresponding period of 2020 driven by higher non-interest income and lower operating expenses.

According to a statement by the company, its gross earnings was down by 15 per cent to N36.4 billion (US$95.66m) in the period under review from N42.6 billion in Q1, 2020, due to lower interest environment in the Nigeria financial sector.

The statement said net operating income after impairments was relatively flat at N24.3 billion (US$63.86m) in Q1, 2021 from N24.2 billion (US$63.60m) in Q1 2020; while non-interest income rose by 10 per cent to N14.1 billion (US$37.06m) from N12.9 billion (US$33.90m) in Q1 2020, driven by successful debt recovery efforts.

Union Bank said its operating expenses fell by four per cent to N17.3 billion (US$17.3m) from N18 billion (US$47.30m) in Q1, 2020, an outcome of sustained cost optimisation efforts; while non-performing loans ratio was flat at four per cent.

“I am pleased to be able to provide the first set of quarterly results under my tenure as CEO following a smooth transition in leadership,” the Chief Executive Officer, Emeka Okonkwo, commented on the results.

“Despite the challenging economic climate, our bank has maintained a steady performance that we can build on for the rest of the year. The bank has responded well to the challenges in the market since the onset of the pandemic. Our overall efforts in Q1 delivered a 12 per cent growth in PBT.”

He said its performance was also supported by strong debt recovery efforts which contributed to growth in non-interest income, enabling it to maintain net operating income at N24.3 billion (US$63.86m) despite the significant reductions on net interest margins across the industry since Q1 2020.

“We are particularly pleased with the consistent growth we are seeing in transaction volumes which validates our digital-led strategy and is delivering returns. By prioritising personalised solutions and enabling self-service, we are attracting transaction-backed deposits and enhancing customer knowledge to better manage risk,” he added.

Meanwhile, the bank has unveiled ‘UnionPro’ which it stated was designed to provide tailored financial services and solutions to supermarkets and large retail chain stores in Nigeria.

It said UnionPro would enable large retailers to access a single platform that offers wide bouquet of solutions to enrich their businesses and optimise their offerings.

These solutions include agency banking, point-of-sale (POS) terminals, in-store ATM deployments, web payment gateways and access to Union360, which is a secured web-based solution that offers end-to-end single point for payments and collections.

The UnionPro would also enable retailers to benefit from overdrafts, short-term finance, distributor finance and invoice discounting finance.

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